Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

Equity Bottom-Up

Kaspi.kz's ecosystem connects consumers and merchants, enabling digital payments, e-commerce, and financial services. The Company gateway to its ecosystem is with the mobile app, which is powered by the company's proprietary technology and enables users to seamlessly navigate between interconnected products and services. Kaspi.kz serves customers in Kazakhstan and Azerbaijan.

<ul>
<li>On Oct 17th, Kaspi.kz, Kazakhstan's super-app, signed a stock purchase agreement to acquire a 65.4% stake in Hepsiburada, a leading e-commerce platform in Turkey. </li>
<li>The transaction is still subject to regulatory approval; Hepsiburada's share price in the US increased by ~60% on Friday after the announcement.</li>
<li>The acquisition makes a lot of strategic sense which would elevate Kaspi.kz to a position to target a combined market of &gt;100 million population (vs. currently 20 million).</li>
</ul>


On Oct 17th, Kaspi.kz, Kazakhstan's super-app, signed a stock purchase agreement to acquire a 65.4% stake in Hepsiburada, a leading e-commerce platform in Turkey. 
The transaction is still subject to regulatory approval; Hepsiburada's share price in the US increased by ~60% on Friday after the announcement.
The acquisition makes a lot of strategic sense which would elevate Kaspi.kz to a position to target a combined market of &gt;100 million population (vs. currently 20 million).


Kaspi.kz: Kazakhstan’s Super-App Acquiring Turkey’s E-Commerce Leader

<ul>
<li>Kaspi.kz is the local super-app in Kazakhstan, with payments, marketplace, and Fintech as its three main business segments.</li>
<li>The company has achieved strong topline and bottom line growth since listing with a RoAE &gt;70% over the years and its share price having gone up ~3x.</li>
<li>Key concerns arise from its political ties and future growth potential, given the country's relatively low population/user size.</li>
</ul>


Kaspi.kz is the local super-app in Kazakhstan, with payments, marketplace, and Fintech as its three main business segments.
The company has achieved strong topline and bottom line growth since listing with a RoAE &gt;70% over the years and its share price having gone up ~3x.
Key concerns arise from its political ties and future growth potential, given the country's relatively low population/user size.


China Merchants China Direct Investments / Equity Bottom-Up

China Merchants China Direct Investments Limited is a close-ended investment company. It invests principally in unlisted enterprises in China. It also invests in hi-tech projects, including initial public offerings and/or pre-listing placements and any shares listed in Hong Kong.

China Merchants China Direct Investments (133 HK)

<ul>
<li>ASM is a hedge fund with a strong track record of investor activism in taking over distressed assets and closed-end funds. </li>
<li>Lazard, the second largest CMCDI shareholder, bought shares last week at a multi-year high sending a strong message to the market.</li>
<li>CMCDI can also explore announcing a discount management program besides agreeing to ASM's claim to sell assets to pay dividends and offer a share buyback to reduce the NAV discount.</li>
</ul>


ASM is a hedge fund with a strong track record of investor activism in taking over distressed assets and closed-end funds. 
Lazard, the second largest CMCDI shareholder, bought shares last week at a multi-year high sending a strong message to the market.
CMCDI can also explore announcing a discount management program besides agreeing to ASM's claim to sell assets to pay dividends and offer a share buyback to reduce the NAV discount.


The Battle of CMCDI: What Is the Endgame?

<ul>
<li>While Elizabeth Kan barely survived the AGM vote, ASM has effectively mobilized minority shareholders.</li>
<li>Lazard (owns 15% of CMCDI) probably voted alongside ASM (owns 9%). Other than China Merchants Group and Victor Chu, almost no "outside shareholders" voted in favor of Kan, .</li>
<li>The next battleground is a vote in November when CMCDI needs to renew its investment management agreement. Intense behind-the-scene negotiations are expected, given the bargaining power ASM now demonstrated.</li>
</ul>


While Elizabeth Kan barely survived the AGM vote, ASM has effectively mobilized minority shareholders.
Lazard (owns 15% of CMCDI) probably voted alongside ASM (owns 9%). Other than China Merchants Group and Victor Chu, almost no "outside shareholders" voted in favor of Kan, .
The next battleground is a vote in November when CMCDI needs to renew its investment management agreement. Intense behind-the-scene negotiations are expected, given the bargaining power ASM now demonstrated.


CMCDI Update: Warning Shot Fired At AGM Despite Kan’s Successful Re-Election

iFast Corporation Ltd. operates a funds and investments distribution platform in the Asia Pacific region.

<ul>
<li>
<a href="https://smartkarma.zoom.us/rec/share/greN_IcTNbNIKfXkLUrkLPlmSXvDzuNh6Oad7iFT39LMx6BL5WsQXTLHfLErBwPT.Xt9FLCjm5WkeCCsj" target="_blank" data-smartkarma-citation="insights:131779" rel="noopener">A recent Smartkarma Corporate Webinar | iFAST: Stellar Performance of Singapore's Global Fintech Player</a> introduced one of the few Fintech players in Asia that has been making profits since 2011.</li>
<li>The successful launch of its HK ePension platform can be highly scalable and is expected to be an important growth driver for the company in 2024 and 2025. </li>
<li>IFast Global Bank is expected to break even in Q4 this year and to be an important growth driver for the group's next 3-year plan (2025 and beyond). </li>
</ul>
<p><em>This Insight is part of the Smartkarma Corporate Webinar series, supported by SGX through the Investor Education Fund.</em></p>



A recent Smartkarma Corporate Webinar | iFAST: Stellar Performance of Singapore's Global Fintech Player introduced one of the few Fintech players in Asia that has been making profits since 2011.
The successful launch of its HK ePension platform can be highly scalable and is expected to be an important growth driver for the company in 2024 and 2025. 
IFast Global Bank is expected to break even in Q4 this year and to be an important growth driver for the group's next 3-year plan (2025 and beyond). 

This Insight is part of the Smartkarma Corporate Webinar series, supported by SGX through the Investor Education Fund.

IFast: A Profitable Fintech Player that Deserves More Investor Attention

Alec is a partner in KT Capital Group and has acted as the interim CFO for a few Fintech and Web 3 companies.

He currently also serves the Research & Investments Partner at Re:base Ventures (rebase.vc), a Web3 and DeFi investment firm with a strong focus on building and incubation. 

Previously, he spent time with Tencent, where he was responsible for the group's investments in the overseas markets (Southeast Asia, the Middle East, and Europe). 

Prior to Tencent, he was in the Principal Investments team at Swiss Re, where he focused on driving the group's investments into financial services and Fintech sectors in APAC. 

He has been responsible for a wide range of investments and transactions (venture/growth, buyout, direct secondaries, etc.) totaling >$5 billion. Alec started his career with Bank of America Merrill Lynch.